The Beatles may have been right in 1964 when they sang "Money can't buy me love", but £250,000 could have bought you a slice of history. Nicholas Enticknap looks back at the birth of the IT industry with the launch of the first mass-produced computer from IBM

Forty years ago this week came a sea change in the history of IT: IBM launched the System/360, the first ever compatible range of computers. That event marked the dividing line between the pioneering days when getting a machine to run at all was an adventure and the creation of a mainstream industry which was to transform commercial and personal life.

Before the 360 arrived, each new computer was designed and developed as an individual machine which would improve on what had gone before, taking advantage of the accelerating pace of new developments in the electronics industry to move ever further forward into the brave new world.

Afterwards, the emphasis shifted from revolution to evolution. There were enough computers in use for protecting earlier investments to become an issue. Users did not want to go through a complex and expensive conversion exercise to transport their programs and data from an existing machine to a new one. Manufacturers preferred not to expand their staff numbers and training courses to cater for an ever wider range of incompatible machines.

IBM realised this early in the 1960s and spent the next few years hammering out the design and development of the 360 (the name was supposedly chosen to suggest that the range covered every angle). On 7 April 1964, the company launched a range of six compatible machines with a 25-fold increase in performance from the bottom to the top, the first ever such mass product launched in the computer industry.

The new emphasis on compatibility struck a chord. The UK's major contemporary computer manufacturer, ICT, followed suit with its compatible range later in 1964 and other suppliers swiftly fell into line. The drive towards portability and interworking has been the mainstay of IT development since, with landmarks including the development of the first cross-platform operating system, Unix, in the 1970s. Efforts to standardise open systems started later that same decade and local area networking came to the fore in the 1980s. Since the 1990s, no one has launched any major new IT product without ensuring support from either the major industry players, the standards bodies or both.

Meanwhile, the pace of computer development has been truly astonishing. The first IBM 360 to reach a customer, the model 40, had a cycle time of 625 nanoseconds and a typical configured system cost £250,000. A typical desktop PC today has a clock speed of 2.5GHz and costs £700. That adds up to a price/performance improvement of half a million times over 40 years.

The 360 story: a good bet

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The 360 was billed at the time as a "bet your company" gamble. The estimated research and development cost of the range before launch was £2.7bn, getting on for twice IBM's 1964 turnover of £1.7bn.

But IBM knew what it was doing. The 360 cemented the company's position as the leading computer company for a generation and gave it total control of the emerging industry. It was not until the client/server revolution of the late 1980s and early 1990s that IBM's grip was loosened. Even today, although Microsoft has the dominant position, IBM is still the largest IT company in the world.

The first System 360s reached customers exactly one year after the launch, in April 1965. The first machine to be delivered was the 360/40, the only one of the six launch machines to be designed and built in the UK.

The range eventually expanded to comprise 15 models, with a 200-fold performance range from the 360/20 at the bottom to the 360/195 at the top. The 195 was the last of the range, launched in 1969.

The beginning of the end came in 1970, when the first models in the successor range, the 370, were launched. By this time a 360 was the computer you were most likely to see, with well over 10,000 installed worldwide. There were more than 7,000 of the entry-level model 20s in use in the US alone.

These are quite staggering numbers when you consider that for the price of the first 360, the model 40, you could employ 250 workers for a year.

Today, in contrast, you can buy 35 state-of-the-art desktop PCs for the cost of one average annual wage, with each computer delivering about 1,500 times the throughput of the 360/40.

The 360 range continued to sell well into the 1970s and was not withdrawn from the market until 1977. You can buy a distant descendant of the 360 today, marketed by IBM, under the brand name eServer zSeries.

Memories of the 360

Management consultant Dan Hayton recalls the IBM 360 as the machine that changed his life. As a student at St Andrews University studying psychology, he learned how to program in Assembler on the university's new 360/44 to process the statistical calculations needed for his coursework.

One day he planned to go sailing with some friends, but a gale was blowing and they could not get the boat out. So, intrigued by his IBM assembler programming experience, Hayton went to a lecture on computing instead. "I was hooked," he says.

He immediately abandoned his degree course to go into computing, initially joining a bureau. That was a Burroughs user, but his early IBM assembler programming experience stood him in good stead at his next job, teaching programming at Control Data Institute.

After a short period at CDI Hayton joined the user community as a programmer with pharmaceutical distributor Unichem and renewed acquaintance with the 360 series as it was coming to the end of its life. "I spent two years with them and saw through the change to the 370," he says. During his time there he rose to the position of software project manager.

The projects he worked on were stimulating, as Unichem was an advanced user running a network of 256 terminals located in depots throughout the UK. Not many organisations were doing that in the 1970s.

The 360 mainframe was front-ended by two System 7 minicomputers "answering the phone for us" - another pioneering application. Hayton's subsequent career included a spell as marketing manager with Synon, supplier of the eponymous system generation language for midrange IBM System 3X machines. He made one of the first television programmes about computers, which was shown on Channel 4.

Finally, he established himself as a self-employed management consultant. Today he is also treasurer of the Computer Conservation Society.

That was the year that was

The IBM System/360 was launched in the week that Beatlemania reached its peak. Their latest single, Can't Buy Me Love, rocketed straight to number one in the UK and, in the US, the Fab Four occupied all of the top five places in the charts.

Liverpudlians have more than one reason to sigh nostalgically. Their football team, under the management of Bill Shankly, was on its way to becoming the League champions ahead of Manchester United. In Scotland, Celtic won the league ahead of Rangers.

A major event north of the border was the opening of the new Forth Bridge, then the largest suspension bridge in Europe.

In politics, Alec Douglas-Home was leading a Conservative rearguard action against dismal opinion polls, and nearly succeeded, although Labour leader Harold Wilson did get to Number 10 later that year with a majority of three. Wartime leader Winston Churchill made his last appearance in the House of Commons in July.

The Brezhnev era started in the Soviet Union when long-time Communist Party leader Nikita Kruschev was deposed. In South Africa, Nelson Mandela started a life sentence for treason. In the US, incumbent Lyndon Johnson retained the presidency by beating Barry Goldwater, and Martin Luther King was awarded the Nobel Peace Prize.

The average UK salary that year was just over £1,000, but the pound in your pocket was worth a great deal more than it is today. The average house price was just £3,300 - one thirty-fifth of the cost of an average house in the UK today.

How we got from there to here

1965 - minicomputers The year following the 360 launch saw the first challenge to mainframe supremacy with the launch of the first mass-market minicomputer, the DEC PDP-8, a highly successful product which continued shipping into 1990.

1966 - online computing Unilever unveiled the first European online computing network in 1966 and the Post Office introduced two-way data transmission over telephone lines later in the same year.

1969 - software The software industry was created in 1969 by IBM's announcement of "unbundling" - pricing software separately rather than bundling it with the hardware.

1969 - the internet The internet started life in the US in 1969 as Arpanet, linking four research establishments. It became the internet with the development of the TCP/IP protocols in the early 1970s.

1971 - microprocessors The building block for modern computers first appeared in 1971 from Intel, originally as a tailor-made component for a calculator.

1976 - personal computers The first PC was launched by Apple in the US in 1976. It was a primitive machine, but development proceeded rapidly and, in 1981, PCs became respectable business tools with IBM's entry to the market.

1980 - Unix The first commercial version of Unix arrived in the UK in 1980 from AT&T. One of the most popular early versions, Xenix, was developed by Microsoft.

1980 - Local area networks Lans became a practical possibility with the publication of the Ethernet specification by Xerox in 1980, and with its adoption in the same year by DEC and Intel.

1985 - relational databases Today's most popular tool for data storage became a mainstream product with the publication in 1985 of Tedd Codd's famous 12 rules. Codd had originally proposed the relational model in 1970.

1989 - the world-wide web Work started on the standards that define the web at Cern in 1989; the standards were implemented at Cern in 1990 and introduced to the internet in 1991.

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